In­vest­ing In­done­sia

Firm to ce­ment its fu­ture in South­east Asian na­tion with big in­vest­ment over next 5 years

China Daily (USA) - - FRONT PAGE - By ZHONGNAN zhongnan@chi­nadaily.com.cn

The State De­vel­op­ment & In­vest­ment Corp will ex­pand its cat­e­gories from ce­ment fac­to­ries to nickel ore mines, power plants and ports in In­done­sia over the next five years. >

State De­vel­op­ment & In­vest­ment Corp, the coun­try’s largest State-owned in­vest­ment hold­ing com­pany by fund vol­ume, will ex­pand its in­vest­ment cat­e­gories from­ce­ment­fac­to­ries to nickel ore mines, power plants and ports in In­done­sia over the next five years, said its se­nior ex­ec­u­tive onMon­day.

With a to­tal in­vest­ment of 2.2 bil­lion yuan ($329 mil­lion), SDIC in­vested and launched the pro­duc­tion of the first phase of a ce­ment plant in In­done­sia’sWestPa­pua province last week.

Af­ter a 16 month con­struc­tion pe­riod, the plant will be able to pro­duce 1.5 mil­lion tons of ce­ment an­nu­ally to meet the coun­try’s surg­ing de­mand for var­i­ous in­fra­struc­ture projects.

Li Bing, SDIC’s vice-pres­i­dent, said the com­pany will in­vest in the sec­ond phase of the ce­ment plant af­ter six months if the op­er­a­tion and sales could main­tain a fast growth pace. This would add a fur­ther 1.5 mil­lion tons of an­nual ce­ment pro­duc­tion ca­pac­ity to the pro­ject.

An­hui Conch Ce­ment Co, China’s largest ce­ment maker by mar­ket value, is re­spon­si­ble for the de­sign of the plants.

The pro­ject cur­rently has 309 em­ploy­ees, in­clud­ing 173 In­done­sian staff. It is part of SDIC’s ef­fort to get more op­por­tu­ni­ties from the Belt and Road Ini­tia­tive.

Sup­ported by more than 200 sub­sidiaries, SDIC has built a strong mar­ket pres­ence in both de­vel­oped and de­vel­op­ing mar­kets, in par­tic­u­lar in the mar­kets of the As­so­ci­a­tion of South­east AsianNa­tions in re­cent years.

“Re­strained by weak in­dus­trial and lo­gis­tics foun­da­tions in cer­tain parts of South­east Asia, many In­done­sian and for­eign con­struc­tion con­trac­tors have to cope with lo­cal ce­ment that costs too much and is of­ten in short sup­ply,” said Li.

This makes it even harder to com­plete projects on time. De­lays caused by sub­stan­dard port and road fa­cil­i­ties, and de­layed ship­ments from Asia, the Mid­dle East and Eu­rope, make mat­ters worse.

Tamba Hu­ta­pea, deputy chair­man of In­done­sia’s In­vest­ment Co­or­di­nat­ing Board, or BKPM, said this is the first ce­ment pro­ject to be put into pro­duc­tion in West Pa­pua province. It will al­ter the cur­rent sit­u­a­tion in which eastern In­done­sia does not have a ce­ment in­dus­try to sup­port the coun­try’s in­dus­tri­al­iza­tion and ur­ban­iza­tion.

“It cer­tainly is not cheap to ship ce­ment to In­done­sia or other parts of South­east Asia from China, mainly due to con­tainer load­ing costs,” said Sun Fuquan, a re­searcher at the Chi­nese Academy of Sci­ence and Tech­nol­ogy for De­vel­op­ment in Bei­jing.

“The ce­ment must be prop­erly packed and pro­tected, other­wise it is easy to get wet and will be­come use­less.”

Sun said it ap­pears Chi­nese com­pa­nies have found a new growth area in South­east­Asia’s ce­ment and power in­dus­tries. Less com­pe­ti­tion in this mar­ket also gives them an early ad­van­tage to se­cure a bet­ter po­si­tion.

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